Bankrolled by the billionaire publishing mogul Walter H. Annenberg and his charitable foundation, the Chicago Annenberg Challenge (CAC) was a five-year school-reform effort created ostensibly to improve public schools in Chicago and elsewhere across the United States. Mr. Annenberg seeded this initiative with $500 million. On December 17, 1993, President Bill Clinton hosted a White House ceremony at which he announced Annenberg's undertaking, calling it “the largest single gift ever made to American public education.”

A Republican who had cultivated close relationships with former presidents Richard Nixon (under whom he served as U.S. ambassador to Great Britain) and Ronald Reagan, Annenberg urged political leaders to “promote widespread ... support for resolute and sustained public investment” in the public-school system. â€¨Reasoning from the premise that America's public schools were chronically under-funded, Annenberg stipulated that each of his grant recipients should be required to raise matching funds – and in some cases twice as much as the value of the CAC grant – from such sources as the federal government, charitable foundations, and corporations.

While the majority of CAC's grants were earmarked for public-school reform, many of them also aided private schools and colleges. Most ($350 million) of CAC's public-school grants were channeled to school-reform efforts not only in Chicago but also in other major cities like Boston, Detroit, Los Angeles, New York, Philadelphia, and San Francisco. â€¨Another $50 million was designated for similar initiatives in rural schools.

While Walter Annenberg provided the money that allowed CAC to function, William Ayers, the former Weather Underground terrorist, was, as author Stanley Kurtz puts it, the founder of CAC as well as “its guiding spirit.” In 1987 Ayers had launched a new career as a professor of education at the University of Illinois-Chicago, where CAC was headquartered.

Under Ayers' stewardship, CAC scarcely focused at all on measures aimed at improving student performance in traditional curricular studies, but rather was guided by Ayers' belief – as outlined in his book Teaching Toward Freedom – that the primary duty of educators was to “teach against [the] oppression” that allegedly pervaded American society, and to thereby encourage revolution and social transformation. Toward that end, Ayers' teacher-training programs, which were funded by CAC, were designed to serve as “sites of resistance” against an oppressive social system.

CAC's grant-making decisions generally were consistent with Ayers' educational philosophy, which aimed to infuse students and their parents with a radical political commitment, and which emphasized social activism far more than academic achievement and test scores. Grant proposals from groups that focused on academics typically were turned down. Rather than fund schools directly, CAC generally required them to affiliate with “external partners” -- one particular favorite was the community organization ACORN -- which actually received the grant money and, in turn, implemented in the schools whatever ideologically-driven programs they wished to institute.

CAC was also a major funder of the so-called "Small Schools" movement, a William Ayers creation whereby individual schools committed themselves to the promotion of specific political themes and pushed students to “confront issues of inequity, war, and violence.” The American Thinker notes that because CAC focused so much more on the radicalization, rather than on the education, of students, it “failed to produce any measurable academic gains, according to [its] own final report.”

When CAC was first established in 1995, Ayers was one of five members of a working group that assembled the organization's initial board of directors. The young community organizer and budding politician Barack Obama was appointed chairman of that board, a post he would hold until 1999. CAC archives show that during their years at CAC, Obama and Ayers worked as a team to advance the organization's agendas – with Obama responsible for fiscal matters while Ayers focused on shaping educational policy. Moreover, the two collaborated to write CAC’s by-laws.

Over the course of Obama's tenure as CAC board chair, the organization gave some $160 million to community organizers and radical education activists. More than $650,000 of that total went to a Small Schools Workshop founded by Ayers and run by Mike Klonsky, a hardline Marxist-Leninist.

After CAC's mission was complete in 1999, Obama remained on the board of directors until the organization phased itself out of existence in 2001. At that time, CAC transferred its remaining assets to a new entity called the Chicago Public Education Fund. Obama served on this Fund’s “Leadership Council” from 2001 through 2004, along with William Ayers’ father (Thomas) and brother (John).